My jurisdiction is: Virginia
I recently met a couple who have a drastic situation brewing and I wondered if there was some Code of Ethics that may have been violated in the lending practices involved with their properties.
To make a long story short, they own 2 adjoining lots. Their goal was to build a home on one and a barn on the other. The barn was to be used in a riding business and farmers market venture. Things did not go as planned and they seriously over extended themselves financially and have been through the whole circuit saving their investment. The last effort to salvage included selling the lot (with the barn now constructed) to the mortgage lender for a fraction of what it was worth, with the agreement that they would pay rent to use it and could buy it back within two years. If they don't come up with the money by the end of the 2 year term, they lose the option to repurchase it and it belongs to the mortgage "guy". This is the same mortgage person who refinanced their loads over and over to increase their debt load. The barn that now sits on the property he is going to get is financed into the mortgage on their house. So the beauty of it is that he will get the acreage and the barn for pennies and they will get their acreage and their house with a mortgage that is paying for the barn, their house and all of the property development on both lots. This figure is so high it is staggering.
Here is the sticky part. It seems, the mortgage lenders "cousin" owns a large parcel of land behind the piece of land in question. Obtaining this lot will give "them" valuable road frontage. I believe he intended to usurp this property all along and used predatory tactics to lead these folks down a path that got him what he wanted for practically nothing. It would seem that there should be some sort of law against this. What can the owners do? They do not have the money to buy the property back and cannot get refinanced again due to the size of their current mortgage and credit. Is there a way to delay what is happening until more legal advice can be obtained? They have not sought legal council because they just figured because they signed the papers, there was nothing they could do. It all comes to a head on August 24, 2009.
I recently met a couple who have a drastic situation brewing and I wondered if there was some Code of Ethics that may have been violated in the lending practices involved with their properties.
To make a long story short, they own 2 adjoining lots. Their goal was to build a home on one and a barn on the other. The barn was to be used in a riding business and farmers market venture. Things did not go as planned and they seriously over extended themselves financially and have been through the whole circuit saving their investment. The last effort to salvage included selling the lot (with the barn now constructed) to the mortgage lender for a fraction of what it was worth, with the agreement that they would pay rent to use it and could buy it back within two years. If they don't come up with the money by the end of the 2 year term, they lose the option to repurchase it and it belongs to the mortgage "guy". This is the same mortgage person who refinanced their loads over and over to increase their debt load. The barn that now sits on the property he is going to get is financed into the mortgage on their house. So the beauty of it is that he will get the acreage and the barn for pennies and they will get their acreage and their house with a mortgage that is paying for the barn, their house and all of the property development on both lots. This figure is so high it is staggering.
Here is the sticky part. It seems, the mortgage lenders "cousin" owns a large parcel of land behind the piece of land in question. Obtaining this lot will give "them" valuable road frontage. I believe he intended to usurp this property all along and used predatory tactics to lead these folks down a path that got him what he wanted for practically nothing. It would seem that there should be some sort of law against this. What can the owners do? They do not have the money to buy the property back and cannot get refinanced again due to the size of their current mortgage and credit. Is there a way to delay what is happening until more legal advice can be obtained? They have not sought legal council because they just figured because they signed the papers, there was nothing they could do. It all comes to a head on August 24, 2009.
